That is the question that emerges after reading Oxford-based RISJ or Reuters Institute for Study of Journalism’s “Digital Journalism Start-Ups in India” report. Released late in May this year, the report analyses six start-ups in the light of India’s rising internet and smartphone penetration. Of these, two — Inshorts (English) and DailyHunt (Hindi and other languages) — are for-profit news aggregators funded by private equity funds. The other two — The Wire and Khabar Lahariya —are not-for-profit news outlets. The last two — The Quint and Scroll — are for-profit content-based outlets. The report, available on the RISJ website, is authored by Arijit Sen, a former RISJ fellow, and Rasmus Kleis Nielsen, its director of research.
The six case studies are patchy and there is no comparison on metrics — whether it is page views, unique visitors, time spent or anything else. It is not clear why these six were chosen and what the context is of the news market they operate in. The case studies are actually just stories of these firms told by their founders. Nevertheless, the report should be read by anyone interested in the future of online journalism for three reasons.
One, it highlights the difference between aggregators/curators and original content creators, what their different approaches mean in terms of business dynamics and the risks thereof. “Content-based for-profit start-ups like The Quint and Scroll will increasingly face head-on competition from legacy titles like The Times of India, NDTV, Dainik Bhaskar, and countless others,” the report says. “Aggregation-based start-ups like Inshorts and DailyHunt, with their clear focus on mobile apps that supplement media organisations’ own contact with users, do not face the same head-to-head competition with large domestic legacy media. Instead, they face the prospect of global technology companies with similar or comparable services turning their full attention to India.” The real competition for all these players remains the overwhelming dominance of Facebook and Google over audiences and revenues.
Two, it really delves into the kind of journalism practised by each of these start-ups and examines their target audience. The Wire, which is still trying to raise money to hire a full-fledged team, is about opinion and comment. The well-funded Quint had at last count more than 80 journalists across the country reporting for the young, mobile audience. For DailyHunt, which offers content from various sources, the market is in Indian languages. “The next 400 million internet users will be local language users,” says its CEO, Virendra Gupta.
The third part was the focus, however patchy, on business models. Most reports on journalistic endeavours only focus on content. But without a robust business model, the best intentions can come to naught. One look at the mainstream news market in India tells you that.
The report states that just being digital does not put these start-ups beyond the pressures that mainstream media faces. As Nielsen puts it: “A sustainable funding model is a necessary (though not sufficient) condition for editorial independence.” Most Indian news organisations, whether legacy or start-ups, overwhelmingly base their digital business on advertising. “This model has not worked in a single market anywhere in the world so far, because the supply of advertising grows faster than demand, driving down CPMs (cost per mille or thousand). Globally dominant players with more users, more data and compelling ad formats draw the majority of digital advertising, leaving everyone else to fight for the rest,” he adds.
Even in the US, with its high internet use and growth, most digital journalism start-ups, which followed a “users first, profits later” path — BuzzFeed, Politico, The Huffington Post — took anywhere between five and seven years to report their first profit. In fact, the report is strongest when it talks of the lessons learnt from start-ups elsewhere.
Time then for Indian publishers to think differently about funding?
Twitter: @vanitakohlik